Brian Byrne

ECO 315 Article Presentation

Too small to torture
New York Community Bancorp has been in business for over 134 years. Recently New York
Community Bancorp underwent a period of rapid expansion acquiring many other smaller, local
banks. As New York Community Bancorps balance sheet kept rising and rising it began to
catch the eye of regulators. Right now the threshold for when the Federal Reserve can declare a
bank systemically important financial institution is $50 billion in assets. As of March 31
st
New
York Community Bancorp had assets just over $48 billion. Daniel Tarullo, a governor of the
Federal Reserve called for this threshold to be completely scraped. He purpose a graduated
regulation system. Where a bank is not only regulated based on its size but also the different
activities the bank participates in. Mr. Tarullo also believes that banks with assets under $100
billion have very little systemic risk. Under $100 billion in assets the bank would not be under
much regulation at all. Above $100 billion, but under $250 billion Mr Tarullo seeks to lighten up
a little on the regulation currently being imposed on these medium sized banks. Above $250
billion in assets, regulation standards would be almost in sync with the current Dodd-Frank
regulations. However people who disagree with Mr. Tarullo are saying that having different
thresholds will invite people to try and alter the numbers to make it appear to regulators like they
are smaller than they actually are. Also to change the Dodd-Frank would require congress to
change the law which may be too much to ask right now.